Most of our money has been invested in the stock market since we moved to the US in 2017, but we are looking to diversify and generate passive, long-term income.

Under current rules, NOLs can only be carried forward indefinitely (not carried back).Losses from stocks (Schedule D/Form 8949) follow different rules and cannot be mixed with Section 1231 losses.

To do that, I was intending to sell some stock (75k to completely pay of home 1). 

Which will probably wind up in the stock market.  

At least you won't have to stock the whole place.

There are many similar suburbs along the 270 corridor in North County that would probably have similar housing stock though you may need to look a little east (toward downtown) to find the inventory. 

I also have a wide range of other investments, including stock options, which I plan to rely on in retirement.

In other words, if one property requires a major repair, reserves from other properties can help cover the expense, reducing the need for each individual property to have a fully stocked reserve at all times.

The stock market is, of course, up and down.

If you’re close to $150,000 in AGI, a few ways you can bring that down AGI is by maxing out a 401k traditional ($23k for 2024 tax year), maxing out your HSA ($4,150 for 2024 tax year), and if you have any capital losses from stocks (up to $3k per year), I would encourage you to have great bookkeeping to ensure you’re capturing all of your deductions appropriately on your rental property.